Decided on August 04,1986

Modiera Bottlers Firm (P) Ltd Appellant
STATE OF JANDK Respondents


ANAND, J. - (1.) THE constitutional validity of the Jammu and Kashmir Excise (Amendment) Ordinance, 1985 being Ordinance No. 11 of 1985, which inserted section 14 -A (1) & (2) in the Jammu and Kashmir Excise Act, Samvat 1958, besides amending section 25 of the said Act has been called in question through the medium of these two petitions. Section 14 -A (1) and 14 -A (2) of the Ordinance read as follows ; œ14 -A. Regulation of sale of liquor in the State: - (1) Notwithstanding anything to the contrary contained in any other law, rule, order, agreement or any other instrument of any other judgment or decree of any court, the Government shall regulate the sale of country liquor in the State by auctioning the country liquor shops on such condi ­tions and for such period as it may deem fit. Provided that the departmental shops existing for the sale of country liquor at the time of first auction shall continue to run at such places and for such period as may be specified by the Government by a special or general order. (2) Any agreement or instrument executed, any letter of intent or order issued by the Government relating to manufacturing, bottling or sale of country liquor, before the commencement of the Jammu & Kashmir Excise (Amendment) Ordinance 1985 shall be and shall always be deemed t6 have been without effect.
(2.) THE backdrop under which the provisions came to be challenged as emanating from the pleadings of the parties in Modiera Bottlers Firm Pvt. Ltd., may first be noticed in brief : The petitioner -firm submitted a proposal to the Govt. of J&K seeking right to manufacture, bottle and market country liquor in the State of Jammu and Kashmir. In response to its proposal, a communication was addressed to the petitioner -firm on 28.11.1983 by the Excise Commissioner J&K Government, wherein after making a reference to the proposal made by the petitioner - firm it was stated that: œIn this connection I am to say that the State Government approves the proposal in principle. This will, however, be subject to the finalisation of all specific details including the fixation of excise duty and sales tax to the satisfaction of the government. In order to finalise these details, a committee consisting of Commissioner and Secretary to Govt., Planning and Development Department, Commis ­sioner and Secretary to Government Finance Department; Commis ­sioner, Sales -Tax and the undersigned has been appointed by the government. After consideration of various details in your proposal you would be required to discuss the matter with this committee on a date which shall be communicated in due course . The petitioner -firm has styled this communication as œletter of intent issued by the respondents in favour of the petitioner firm authorising the manufacturing, bottling and marketing of the country liquor in the State of Jammu and Kashmir. According to the petitioner -firm, relying upon the said œletter of intent and treating it as an œassurance to go ahead with the manufacture, bottling and marketing of the country liquor m the State of Jammu and Kashmir, it proceeded with the construction of a factory, after getting some land allotted from the SIDCO for the same purpose. The respondent -State, however, decided to auction the country liquor shops in the State and the petitioner -firm filed writ petition No. 873 of 1984 in the Jammu Wing of the High Court invoking the doctrine of promissory estoppel and sought by way of interim relief, an order to restrain the conduct of auction of country liquor shops in the State. In the application seeking interim relief, being C.M.P. No. 1821 of 1984 the following order came to be passed on 29.11.1984 : Also heard on C. M. P. No. 1821 of 1984. Issue notice of the C.M.P. also returnable within three weeks. Till then the implementation of the excise auction notification to be held on November, 30, 1984 is stayed. At this stage Mr. F.A. Goni, learned Government Advocate takes notice and submits that a short date be given for filing the reply to the C.M.P. with respect to the public auction scheduled to be held on November 30, 1984. In view of the acceptance of notice by Mr. Goni, learned Government Advocate, the case is now fixed for December 5, 1984, for further orders. Till then by modifying the above order passed of stay, the further proceedings for the proposed auction in question shall remain stayed. Objections were filed to the aforesaid Civil Misc. Petition, besides filing the counter and rejoinder to the main writ petition. The prayer made in the aforesaid writ, petition was for the issuance of a writ, order or direct ­ion to the respondents to treat the letter of intent issued in favour of the petitioner on 28.11.1983 as a licence for blending, bottling and selling of country liquor in terms of the Jammu and Kashmir Excise Act, Samvat 1958 or in the alternative for the issuance of a direction to issue a formal licence in favour of the petitio ­ner under the said Act.
(3.) WHILE the said writ petition was pending disposal h the High Court a Bill was introduced in the J&K Legislative Assembly, being Bill No. 14 of 1985 titled œthe Jammu and Kashmir Excise (Amendment) Act 1985 . The bill sought to insert Section 14 -A (1) and (2) and amend section 25 in the Jammu and Kashmir Excise Act, Samvat 1958. The statement of aims and objects attached to the bill reads as follows ; œSTATEMENT OF AIMS AND OBJECTIVES The experience of most of the States of the Union in general and our neighbouring States in particular show that the excise revenue is maximized by putting the country liquor vends to open auction and accordingly the Government took a considered decision to switch over to the auctioning of country liquor vends rather than giving them to a single individual or running them departmentally. While finalizing the resources position of the State for the year 1985 -86 with the Planning Commission additional excise revenue to the tune of Rs. 15 crores had been anticipated on account of auction of country liquor vends. It could not, however, materialize because a few writs have been filed against the policy and orders of stay obtained from High Court. The share of the excise revenue in the estimates of additional resources mobilization for the 7th Five Year Plan period is a major one. The 7th Five Year Plan and the allocation approved by the Centre are based on these projections, and therefore, it is of utmost importance for us to realise the targets we have set for ourselves in this behalf. This year being the first year of the 7th Five Year Plan period increases the importance of issue. In view of the difficulties, in putting into operation the new excise policy, amendments to the existing provisions of the State Excise Act appears necessary, in the light of our commitments made to the Planning Commission we can ill -afford to take any chances, should the judgment of the Honble High Court in the above referred writs go against the State and hence the need to amend the Excise Act suitably. The Bill was introduced on 16.9.1985 and on 18.9.1985, it was referred to a select committee of the House with the direction to the com ­mittee to submit its report to the House on 23.9.1985. The select committee met on 20th, 21st & 23rd of September, 1985 and on 23.9.1985, submitted its report wherein it was suggested that Bill be withdrawn. The bill was accordingly withdrawn on 24. 9.1985. The House was adjourned on 24.9.1985 sine die and was prorogued on 8.10.1985. The impugned Ordin ­ance came to be issued on 25.10.1985. The petitioners have questioned the ordinance on various grounds to which a reference shall be made in the latter part of this judgment. In Modiera Bottlers petition it was averred in para 7 of the petition that the pleadings in the earlier writ petitioner be treated as a part and parcel of the present writ petition & that the government should be bound by the doctrine of promissory estoppel to honour its commitment & to give the firm the exclu ­sive privilege of blending, bottling, manufacturing and selling of the country liquor. On behalf of the respondent -State, the attempt of the petitioner to invoke the doctrine of promissory estoppel was stoutly resisted firstly on the ground that the so called œletter of intent dated 28.11.1983 could, by no stretch of imagination be constituted as any assurance on the part of the government to the petitioner that it shall get the exclusive privilege of manufacturing, bottling and selling country liquor and that, in fact, no assurance of any type was given out by the government and that whatever other steps the petitioner look for construction of the factory etc , were taken by him with a view to pressurize the government and that the steps taken by the petitioner -firm to construct the factory, were not even autho ­rised by law. Secondly, it was contended that there could be no estoppel against the statute and, thirdly, that the Govt. as well as the legislature has the jurisdiction to change it policy in the public interest and that it is not open to any party to contend that the government should remain a slave of its own policy decision and can, under no circumstances, alter or change it even if the change has to be made in public interest. This aspect of the case, however, would not detain us because Mr. Handoo, learned counsel for the petitioner, has stated at the bar that no finding be recorded with regard to the availably or non -availability of the doctrine of promissory estoppel in favour of the petitioner because, urged Mr. Handoo the question of pro ­missory estoppel would be debated in the earlier writ petition and that in this writ petition it is not necessary to decide that question. Learned counsel stated that the pleadings to that effect in the writ petition be taken as not pressed by him for the purposes of the decision of the present writ petition the ambit of which maybe confined to the determi ­nation of the constitutional validity of the Ordinance. In view of the sub ­mission of Mr. Handoo we refrain from expressing any opinion on the merits of the controversy with regard to the availability or non -availability of the doctrine of promissory estoppel or its applicability to the case of the petitioner.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.